Iowa Wins Challenge to Cross Tier Ownership Laws

The State of Iowa has won a challenge by a beer retailer whose license was not renewed when the state learned that the retailer was owned in part by a winery. In New Midwest Rentals, LLC d/b/a Des Moines Valero #204 vs. Iowa Department of Commerce, Alcohol Beverage Division Iowa state district court judge David May ruled that the division’s previous administrative order was consistent with the plain language of Iowa Code Chapter 123. Therefore, the ABD’s order was not based “upon an irrational, illogical, or wholly unjustifiable interpretation” of Chapter 123. Iowa Code § 17A.19.  The court noted, “There is no dispute that Mr. Forsythe is a “person engaged in the business of manufacturing wine.” Therefore, under the plain language of section 123.45, Mr. Forsythe cannot hold a “retail beer permit.” Additionally, he is prohibiting from maintaining an “ownership” or “operation[al]” relationship with a “permittee authorized under [Chapter 123] to sell at retail.” Therefore, he cannot own or operate Petitioner, whose class “C” beer permit authorizes Petitioner “to sell beer to consumers at retail for consumption off the premises.”





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